DECATUR — Being on your own for the first time can be intimidating, and without the right information, making mistakes is easy.
At MacArthur High School, students take a course that's new this year, called “Careers,” but the class is really life lessons to help them prepare for college, work and making their own decisions.
"The goal of the district is to develop our students as a whole, and that includes college and career readiness and financial literacy," said extended learning coordinator Ashley Grayned. "We don't want our students to go out into the world and not be informed of things like debt and how it affects your credit."
A recent class was devoted to financial literacy, with guest speaker Nikki Garry, founder of Your Money Matters, headquartered in Decatur. A graduate of MacArthur High School, Millikin University and Liberty University, Garry specializes in financial coaching and seminars. She didn't mince words with the students, though she tried to make her talk fun and engaging.
Using a Family Feud format and a laptop, Garry put questions on the classroom screen: What do students do with their student loan refund checks? She encouraged the students to applaud each other's answers like people do on the show. She found her answers by asking Millikin University students the questions.
The top four answers for that question were save/invest – which none of the students guessed – school expenses; clothes and personal items; food.
She told the students that 76 percent of young adults in their twenties have debt like credit card and student loans, and 67 percent of college students take out loans to pay expenses.
“The No. 1 reason students drop out of college is due to debt,” Garry said. “The kind of debt you have in your twenties is credit card, student loans and a car loan.”
Even first thing in the morning, Jennifer Toney's energy and enthusiasm are infectious.
The first lesson she wanted them to learn was to avoid debt. With good grades and diligent searching and application, college-bound students can qualify for scholarships and grants that don't have to be paid back, avoiding debt while still meeting expenses for college.
The next Family Feud question was “What will you purchase with your first credit card?”
The top four answers given by the Millikin students were food; gas or other car expenses; clothes and personal items; something small. That last item, Garry said, was from students who understood that by using a credit card for small purchases which they would immediately pay off, they would build their credit.
“Americans owe $1 trillion in credit card debt,” said Garry, who also gave presentations at Eisenhower High School and Stephen Decatur and Thomas Jefferson middle schools. “Sixty-three percent of college students make credit card purchases without the money to pay for them.”
Even worse, she added, some college students didn't know they had to pay it back. The two top reasons for taking bankruptcy in the United States are credit card debt and medical bills.
Her second lesson was: Avoid credit cards.
Fifty to 70 percent of Americans live paycheck to paycheck, she said, and over half have less than $1,000 in savings, while 19 percent have no savings at all. The general rule of thumb is to have three months' worth of living expenses tucked away in case of a job loss or emergency, like a car repair or medical expense, but few Americans do.
On summer and winter breaks, she said, wise students work and save their money. They don't blow it all on partying or shopping. With hard work and diligently saving money, it would be possible for a young person to be able to pay a lot of college expenses without taking out a loan.
The average student loan payment is $351 per month, which means that a new graduate in his or her first job already has a substantial amount coming out monthly, before rent, food, utilities or car expenses, making it difficult to save, think of future plans like buying a home. The lesson: Avoid student loans.
Two of the students in the class knew many of the answers, and are probably going to be just fine when they're on their own.
“My mom used to work for Regions and Hickory Point (banks) and she taught me about loans and mortgage payments and all that type of stuff,” said senior Malcolm Beasley, who has a job and is saving for college, as well as paying his own car expenses.
Mac McGlasson used to work at Olive Garden, and many of his co-workers were in college, and he heard them talk about the expense.
“Some of it's just general knowledge, and I've done some research, too,” Mac said. “You hear things and see things, and it's just a lot of knowledge I've picked up over the years. I try to be smart about my money because I know that I want to be really prepared for my future.”